Thoughts from Ciana

  • 10:48:06 pm on March 3, 2009 | 3

    TRADER JOE’S VALUE RINGS TRUE

    While working on summarizing the results of a recent workshop “Identifying Your Unique Value” for a non-profit client, I took a break to run to my neighborhood Trader Joe’s to buy critical ingredients for last night’s dinner (pine nuts and basil for pesto sauce).

    As I was walking through the store, it reminded me that here’s a store that delivers a compelling value proposition to its customers.  I could have gone to Andronico’s or Lucky to pick up these few items.  But I didn’t.   Why?  Because Trader Joe’s offered me a compelling value proposition to cause me to chose them over my alternatives.

    Let’s look at what makes a value proposition compelling and WHY theirs’ passes the test.  A value proposition communicates what’s important to the customer segment (in this case someone who wants a neighborhood grocery store to buy fresh ingredients at decent prices).  In essence a value proposition should answer the question: why should the customer buy from me vs. the competition? The value proposition is more than a promise — it must ring TRUE to the customer. At Ciana, we have a simple acronym for remembering the components of a good value proposition:
    T – Targeted at a specific customer segment
    R – Relevant to that customer segment
    U – Unique vs. the competition
    E – Evidenced (proof)

    Trader Joe’s TRUE value proposition gleaned from their website and “Fearless Flyer” looks something like this: Trader Joe’s is a neighborhood grocery store for people who want an adventurous buying experience for interesting specialty foods and every day basics at value prices.  Unlike chain supermarkets, Trader Joe’s is as much about value as it is about great food. (I always find myself grabbing just a few extra items not on my list — yesterday I grabbed a package of Mintz’s tofu blintzes, Manchego cheese, and dried apricots for my kids’ lunch).  So what’s the evidence or proof of the value?  For the critical items on my shopping list, the basil is fresher and the pine nuts are far less expensive than I can get at my neighborhood Lucky and the cost is a fraction of what it would cost me at my neighborhood Andronico’s store.

    For many, shopping is a chore — when I shop at Trader Joe’s, it’s fun and I look forward to the samples bar to get ideas for a quick family dinner.

    So why is it important to have a good value proposition? As a shopper I have many choices. It’s important for businesses to communicate their value to customers. I could just as easily have gone to Andronico’s or Lucky, but instead I chose Trader Joe’s, which is a few blocks farther  from my house, because of the value experience.

    Also, a value proposition helps to guide the actions and choices of not just customers but also employees.  On my visit to Trader Joe’s I saw how employees embodied the fun and adventurous spirit which is part of their value proposition. Making Trader Joe’s a fun place to shop doesn’t just apply to customers. Did you know that if you hear a single bell ring in a Trader Joe’s store it means a cashier needs a price check? Two bells means an item needs to be put back on a shelf. Three bells calls a manager. I heard four bells ring and the checkout girl looked puzzled, and then said “oh, that must mean ‘hot looking guy in lane four?'”.

    Now I need a quick dinner to bring in to a meeting tonight.  Time to head to Trader Joe’s!

     

Comments

  • wendy k 12:30 am on March 4, 2009 | # | Reply

    You have so hit the nail on the head. TJ’s is my most favorite place to shop. Now try moving somewhere that there is NO Trader Joe’s within 20 miles and it’s sheer torture.

  • Georges Geller 1:27 am on March 4, 2009 | # | Reply

    This would seem to be correct for all businesses and not just Trader Joes. With so much competition in all areas,the question should be why would a potential customer visit one business over another if the products were basically the same?

    Very good article.

  • Value Propositions: Hidden Beneath the Iceberg « Thoughts from Ciana 4:50 pm on March 18, 2009 | # | Reply

    […] a real-life example, take a look at the Trader Joe value example that Nancy talked about […]


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